Key Takeaways
- FedEx shares moved sharply higher in extended trading on Thursday after the shipping giant announced plans to spin off its freight business as a separate public company, overshadowing a lowered full year outlook.
- The stock has oscillated in an orderly ascending channel since July last year, with the price recently finding buying interest around key moving averages.
- Investors should watch key overhead areas on FedEx’s chart around $305 and $370, while also monitoring important support levels near $278 and $255.
FedEx (FDX) shares moved sharply higher in extended trading on Thursday after the shipping giant announced plans to spin off its freight business as a separate public company, overshadowing a lowered full year outlook.
Analysts argue the spinoff, which FedEx expects to complete within the next 18 months, could generate up to $20 billion in shareholder value by streamlining operations and seeing the company merge its separate Express and Ground units, resulting in a boost to profits.
Separately on Thursday evening, the company lowered its full-year fiscal 2025 outlook, noting that conditions remain challenging, in part, due to weaker demand from business customers. However, the shipper said December volumes were so far ahead of forecasts.
FedEx shares have gained 9% since the start of the year as of Thursday’s close, significantly trailing the S&P 500’s 23% return over the same period. The stock rose nearly 9% to $300 in extended trading.
Below, we take a closer look at FedEx’s chart and apply technical analysis to identify important post-news price levels to watch out for.
Ascending Channel in Play
FedEx shares have oscillated within an orderly ascending channel since July last year, a chart pattern comprising two upward sloping trend lines drawn above and below a price series that mark established support and resistance levels,
More recently, the stock has found buying interest around the closely watched 50- and 200-day moving averages, with trading volume on Thursday registering its highest level since late September.
Let’s identify two key overhead areas on FedEx’s chart to watch amid the potential for follow-through buying and also point out several important support levels to monitor during retracements.
Key Overhead Areas to Watch
The first overhead level to watch sits around $305. The shares may run into resistance in the area near a trendline that connects countertrend peaks that formed on the chart in August and September with the November swing high.
To forecast an upside target above the ascending channel, investors can use the measured move technique, also referred to by chart watchers as the measuring principle.
This works by calculating the distance between the pattern’s two trendline in points and adding that amount to the channel’s top trendline. For instance, we add $50 to $320, which projects a target of $370, a location about 34% above Thursday’s closing price where investors may decide to take profits.
Important Support Levels to Monitor
During pullbacks, investors should initially monitor the $278 level, which currently sits just above the 200-day MA. While the stock looks set to open well above this area on Friday, retests of this region may attract buying interest near troughs that formed on the chart in August, September, and December.
Finally, selling below this level could see FedEx shares revisit lower support near $255. Long-term investors may seek buy-and-hold opportunities in this area near a multi-month trendline that links a range of comparable price points on the chart dating back to July last year.
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As of the date this article was written, the author does not own any of the above securities.
